State Of The Industry 2015: Younger Shoppers Are A Growing Force
David Christakes, co-owner of Illinois-based Alsip Nursery (along with this brother Richard) and long-time industry consultant Sid Raisch each have a vested interest in the future of the independent garden center industry. The two of them recently talked with Today’s Garden Center Senior Editor Brian Sparks about the issues that most concern them, and where the industry may be headed in the coming years.
Brian: How are consumer demographics and buying patterns changing this year?
Sid: There’s a lot being said about this change, but I think the reality is that there’s not as much actually happening, at least right now. There are more younger families coming into your garden center today, but that’s because there are more 25-year-olds now than there were a few years ago. These young families will make the choice to invest in a home at some point, and when they do that, they’ll end up in a home and garden area somewhere. I think we are seeing that, and while it’s not big numbers yet, it’s coming fast and we need to be prepared.
David: I’ve come to the realization that the younger consumer isn’t loyal to any particular place, but they do have preferences on where to shop. My unofficial goal is to make us the first name they think of when they think of gardening or plants.
Sid: The silent generation is all but gone from the garden center, and now the baby boomers are aging out. The garden centers not able to adapt to younger people quick enough to replace those aging out will see big problems. In a couple of years there’s going to be a huge shift. The clients I work with are tracking this closely and making sure they stabilize current customers and put sincere efforts into gaining new ones. A lot of people are putting their POS systems to work better than they have in the past, or using social media and eMail marketing to stay in touch as other traditional advertising becomes less effective.
David: I compare our product mix, how we sell it and the information we convey to our customers to how Kohl’s sells its products to my family. How are major retailers marketing to their customers? As a garden center, you have to take yourself out of the dirt sometimes and start retailing that way. We need to simplify everything. Our younger customers don’t want to feel intimidated by some green thumb expert. They want someone like them who has faced the same challenges they have and can show them a path to where they want to be with their landscape. I feel like it’s not as hard as people make it seem to sell to that younger generation. I think it will be easier. You just put what’s blooming right now directly in front of them. If it’s colorful and beautiful, they will buy it.
Brian: What can be done to adapt to younger customers as their shopping habits change?
Sid: One important thing is to hire some of them and listen to them. They know their peers. The most successful garden centers I’ve seen over the last few years are that way because they attracted Generation X heavily. They also staff accordingly.
David: I am looking for the guys from the movie “The Internship.” I’m not looking for a master gardener or a certified horticulturist. Plant knowledge is fine, but you don’t have to know plants to sell shrubs. You have to know people, and the plant knowledge can follow. I’m looking for people who know how to communicate a specific message to other people. It’s tough to find those kinds of people, but when you do you have to retain them.
Brian: What’s the hottest trend you are seeing in the industry today?
David: This year it’s been all about butterflies. I can’t tell you how many times I’ve been asked about new varieties that attract butterflies. It happens almost on a daily basis, to the point where I would have sold my soul for some milkweeds when we ran out. Our suppliers are in a tough spot, and we are having trouble getting enough supply from some of them, so I’ve had to go outside the box and work with some suppliers we haven’t done a lot of business with in the past. One thing’s for sure: the kids are interested in them and want to grow the plants where butterflies lay their eggs. It’s definitely on the rise.
Sid: This was a developing trend over the years, but now everyone in the business is getting this kind of demand, even if they weren’t looking for it. Kudos to those who saw it coming and lined up the right product for it. The trouble was, the supply side wasn’t ready.
David: I knew we would have supply issues, so I started looking around in advance. Luckily, we were able to keep enough plants in stock.
Brian: Do you see this interest in butterflies extending to bees and other pollinators?
David: I hope so, but bees are different than butterflies. Some people are just apprehensive about putting hives in their backyard because they think they’ll get stung.
Sid: There’s a niche of people who are actively supportive of bees. They’re tapping into it, but I agree that the vast majority of the general public has an attitude that bees are a good thing for our food supply, but don’t want to get stung. They are much more likely to respond to butterfly messaging. The good news is that pollinators and habitats work together as part of one big cocoon, which means people will buy anything that has an association with butterflies, habitats and the food supply.
Brian: What categories have you seen performing well this year?
David: Plants are on the rise. We are in the second year of some really phenomenal spring seasons. Last year was great and I didn’t think it could be getter, but it has. We are selling perennial nursery stock that four to five years ago I couldn’t move, especially larger trees and shrubs in 15-gallon pots.
Sid: It’s been an amazing turnaround for the industry. Plants are back in a big way. Big baskets are selling really well at all price points. Those who are putting out a better effort are getting better results, especially with something like grab-and-go containers, or anything pre-made.
Brian: How do you plan to keep these strong sales continuing through the rest of the year?
David: Our customer appreciation event in June brings in a good crowd, exposes them to our summer crops and hopefully encourages them to replace annuals that have gotten tired since the spring. It helps to have traffic-driving events in the summer, and we try to provide a family event atmosphere. We also jumped on the CSA bandwagon. It’s gone really well, and we’ll probably expand it next year.
Sid: I would agree on the food craze. The rate of increase has slowed, but it’s still rising. Anything from herbs and veggies to having a CSA or a farmers’ market; these are all strong ideas, and it’s not too hard to figure out how to do it. Lots of people are trying it, and there’s lots of information available. I see this trend continuing to increase next year. As the season continues, it’s an effective strategy.
Brian: Any other sales details?
Sid: We are seeing several retailers doing well even when their items per transaction are going down. It was alarming at first, but it’s because people are buying one big item that costs $50 to $100 as opposed to 10 smaller, lower-priced individual items. It’s creating a shift.
David: We have seen that as well. I had the same mini-freak out. But when you look at our average sales, gross margin and margin percent, those numbers all have green arrows next to them pointing up. From what I’ve seen, it sounds like an industry-wide trend.
Brian: How can the supply chain work together to increase consumer awareness and education about plants?
Sid: I think responsibility belongs to whoever picks it up and runs with it. Retailers need to get out and visit their growers, walk through their facilities and get to know them on a deeper level and understand what’s available and not available and why. On the other side, growers need to get into and even work in a garden center for a couple days. This would go a long way to understanding the difficulty and problems a garden center has and how to differentiate service, delivery and product.
David: The vendors I talk to have been able to change their methods to accommodate us. For the ones that can’t do this, we try to do it for them.
Brian: What are the biggest factors that could affect your business, and other garden centers, in the next year or two?
David: There’s always been a number of factors. The way to handle them is to know how good you are, and how good your team is, at reacting to the inevitable challenges that will come up. How fast and how smart can you adapt to problems like weather? People ask me how we compete with box stores. It’s simple: just do what you do, and do it better than them. I’ll adapt quicker and bring in the right products quicker because, as an independent, those are my advantages.
Sid: Our industry is complicated compared to just about anything else. It has huge challenges that don’t exist in other businesses. Being adaptable and flexible is key, as is being financially strong. Another issue is the future of your business and who will own it. We talked about baby boomers aging out as customers, and we also have a big bubble of retailers aging out. Some will close down if they don’t have an exit strategy. Some can transfer to another generation, but in doing so the failure rate is sadly very high. For any new garden center owner, if they learn how to operate and don’t come in assuming they know better, they have a good chance.
David: Our industry could easily just fold up shop and let the box stores have it. But they will never service the industry the way we can. For the independents, it comes down to whether we have it in ourselves to do it. It needs to be passed down and taught through experience. My brother Richard is 33, and I’m 31. We’re young and passionate, and we have a lot of great years in front of us, and a great team behind us. We don’t run from challenges, we take life head on and realize if you can imagine it, you can see it to reality.